Author: blockcitynews

Bradley Tusk, founder and CEO of Tusk Ventures, has responded to Jamie Dimon, head of JP Morgan, who said bitcoin and cryptocurrencies generally were in a big bubble. Eventually they would collapse.

Tusk makes a point that we have already made numerous times, that bitcoin is an alternative to current central bank money. He doesn’t say it in so many words, but the implication is the same.

… People are desperately seeking both a safe haven from the volatility of their own currency and homeland, and for a way to connect with others who think like they do – whether they share a common passport or not.

That’s the point. It is the reason why Dimon is wrong. Cybercurrencies may have rises and falls. Many may go out of business, but not all. Many may go down, but not necessarily to zero.

Determining the value and volume of money via a price fix, which is what central banks do, doesn’t satisfy the growing number of people who understand the sad simplicity of the process. It has gone on too long and been explained in ways that are too specific. The specificity gives rise to further repugnance,

He says, “Faith and trust, like anything else, needs somewhere to go during a vacuum.” And that is the point. There is something to take the place of state currencies now, beyond gold and silver which are highly controlled by banks.

China may try to crush cryptocurrencies, or take them over, but one way or another for the foreseeable future some cryptocurrencies will continue and even prosper.

And the currencies that central banks do take over will probably collapse because they will lose the qualities that make them an alternative money. Price fixing doesn’t work, whether applied to state money, or alternative currencies.

At least some cryptocurrencies will continue, even after a major crash. They are not entirely going away. Even if outlawed they will continue via gray- and black-markets. People have the ability to make private money again, and they will continue to use it.

Jamie Dimon, chief executive of JPMorgan Chase & Co., has said that bitcoin is a fraud and a financial bubble.

He said bitcoin was as bad or worse than Tulipomania. As a result, cryptocurrencies generally moved down. Bitcoin itself lost five percent. This comes on top of Chinese moves to reduce crypto exposure throughout the county which thrust bitcoin below $5,000..

Anyone trading cryptocurrencies would be fired, Dimon said. But, on the other hand, he wouldn’t sell bitcoin short because it could still rise a lot more before crashing.

Bitcoin is probably overpriced but that doesn’t mean it will fall to nothing. There is a reason for bitcoin. It is a private money that people are using instead of central bank currencies.

Many people do not like central bank currencies with their too-low interest rates and too-high volume of money. Bitcoin is an option, along with other cryptocurrencies, to diversify.

Bitcoin may indeed go lower, perhaps much lower. But it won’t simply vanish until alternatives to central bank currencies are offered. Central banks themselves say they are working on such alternative currencies. But it is highly doubtful that central banks can create legitimate alternatives.

Gold and silver are good alternatives to cryptocurrencies But gold and silver markets seem overwhelmingly controlled by central banks and Wall Street firms.

Bitcoin and other cryptocurrencies are not simply going to vanish overnight. Right now they represent a definite alternative.

Tje People’s Bank of China (PBoC), banned ethereum-based coins but did not after all seem to have much of a result.

Just the other day, the PBoC said initial coin offerings (ICOs) were restricted in China. Ether, which is etherum’s currency, plunged as did bitcoin. But now both bitcoin and ether are back up. Bitcoin moved up a staggering 500 dollars.

Bitcoin seems to be sustaining its higher price and may soon go above $5,000 once again.

The United States, Europe and Asia account for much of the crypto market. Over time, China may reconsider, but in the meantime the market marches on.

Governments run money through nation states, and behind government are powerful families. That is how money works. It is a monopoly enforced by government and central banks among others.

Today this is less true than it used to be because of cryptocurrencies. Cryptocurrencies are private money, not quasi-public money such as that offered by nation states.

The cryptographic nature of such money and lack of centralization sustains cryptocurrencies. But now big banks are getting together to oust cryptocurrencies altogether.

No doubt they are doing so at the behest of central banks that cannot issue real crypto without losing the special privileges that they currently have received from governments.

They will issue digital currency immediately convertible into dollars and other national currencies. But it is not clear how well this will work. People are using alternative money like bitcoin because it is alternative.

The new government money will just be a midpoint between truly private money and government currency that is completely, horribly transparent. Eventually it will have very few of the attributes of truly private money

A big fight is coming as we have warned numerous times now. It is not clear who will win. That’s because previously there were few alternative to government monopoly money. But now there are.

And people may not be willing to give them up. Especially when the alternative is fully transparent, digital money that reveals every part of your financial life at a glance.

A self-regulatory group in China is warning about initial coin offerings (ICOs). The National Internet Finance Association of China said ICOs are hyping deals and investors ought to be very careful. The group works with the government.

The group was created by the Chinese central bank in 2016. ICOs have already received regulatory scrutiny and now the central bank is said to be writing regs that may suspend ICOs altogether.

India’s central bank is getting into the blockchain business. A central bank research group will focus on the blockchains. The Institute for Development and Research in Banking Technology (IDRBT) is the group that will build them.

India wants to use blockchain to help digitize the rupee. The government has already started down that path, even while denying it. It has taken many higher notes out of circulation and says the withdrawals are only temporary, designed to deprive criminals of usage.

But the notes haven’t been replaced and the idea is that India has advanced toward this new goal, without admitting it. There is bound to be plenty of controversy going forward. It has hardly begun.

The Hong Kong Securities and Futures Commission (SFC) and Dubai are partnering.

It is a cooperative agreement. Hong Kong will help Dubai build technology. Dubai wants to be is already putting documents on a blockchain and is setting up digital passports.

as we have observed before, this progress is in the public sector. Crypto may have public applications but many of the changes will take place privately.

Dubai is using technology to re-enforce the way things are currently, not to make things less controlled. Dubai’s government may think crypto will just strengthen what is already there, but in fact it may move over time in opposite direction.

That won’t help Dubai’s government but it will help rationalize regulation and eventually make it more modest.